Industrial park goes forward on 4-3 vote

Public hearing must be held for funding

Published: Tuesday, May 14, 2013 at 11:36 p.m.

Last Modified: Tuesday, May 14, 2013 at 11:36 p.m.

Davidson County commissioners voted 4-3 on Tuesday to move forward with a planned industrial park project near Linwood.

Despite the affirmative vote, commissioners did not appropriate any funding for the project, an action that must come after a public hearing.

Davidson County Economic Development Commission Executive Director Steve Googe, who asked commissioners for the commitment, said the vote will allow him to talk with landowners, seek loans and work out other specifics about the project.

Commissioners have been divided over the project since they were first asked to commit $10 million toward the repayment of loans and development costs at the site earlier this year.

The EDC's plan is to develop about 1,100 acres of property below Belmont Road in Linwood in three phases.

Commissioners voted Tuesday to move forward with the first phase of the project, which encompasses about 250 acres, Googe said.

The first phase of the project is estimated to cost about $7.6 million, according to EDC estimates obtained from the North Carolina Department of Commerce.

Commissioners were originally looking at moving forward with the first two phases of the project, but Davidson County Commissioner Sam Watford recommended that idea be scaled back.

Watford voted in favor of moving forward with the project, along with Davidson County Commissioners Don Truell, Larry Potts and Fred McClure.

Before the vote, Kepley went through a long list of concerns he had about the project, including the location of the site, its proximity to major population areas like Thomasville and similar plans for parks in other areas.

Kepley also voiced concerns about specific things that have occurred in the park's planning and execution in recent years.

Plans for the Linwood industrial park were once much larger and consisted of a 2,700-acre megasite that extended above Belmont Road to Sam Sharpe Road, according to records obtained from the Department of Commerce.

In the mid-2000s, several residents who live north of Belmont Road accused a company hired by the Department of Commerce and the EDC of drilling on their land without authorization. Landowners said they were told the drilling was for sewer; however, records now indicate the drilling was for a limited environmental site review for the Department of Commerce and the EDC.

The EDC also spent tens of thousands of dollars seeking and acquiring options from land owners in the mid-2000s, when Toyota was considering the Linwood site for a possible expansion, according to records. Several land owners recently told The Dispatch they were threatened with eminent domain.

"Some of these options have been gotten by threats and intimidation," Kepley said. "If you don't sign here, you are going to lose a lot of money because we are going to seize the land through eminent domain. That's not true."

Kepley went on to say, "I've been in the statute books and somebody getting options or getting benefit this way ... I believe that many times depending on circumstances, that could either be fraud or accusation of property by false pretense. I know how to use those N.C. Statutes. I think that goes deep enough for me to consider asking for a criminal investigation. I am not going to sit here and let our county people be taken advantage of by people like that and scared into signing any type of paper."

It would take about $17.3 million to pay for the development of the entire site, including money for the extension of sewer, water and gas lines and the grading of one 500,000 square-foot pad and another 1 million-square-foot pad, according to estimates prepared for the EDC. The EDC also plans to install roads, curb and gutters leading to the land at the site.

The EDC has spent about $400,000 on the project already, including $71,160 on option-to-sell agreements, according to records.

Googe has also identified several possible grants for the project, and the N.C. Department of Commerce awarded the EDC a $1.67 million Megasite Grant last year.

The megasite grant, which Googe has said is already in the bank, is to be used for land acquisition and must be used by the end of 2013, according to the grant agreement.

Several commissioners, including Yates and Jarvis, asked Googe is the grant can still be used for a project that is not at least 1,100 acres, which is also a requirement in the grant's original request for proposal.

"I don't recall that at all," Googe said. "It wasn't explained to us that way."

The actual price of the land, which commissioners had asked of Googe before the meeting, is still unclear.

The EDC's current land acquisition plan involves owners putting their land in a limited liability company with other stakeholders in the project. If a company were to purchase property at the site, members of the LLC would share the profits, according to records.

Tom Smith, a member of the EDC board and a certified public accountant, said while an LLC sounds like a "strange animal," it's really not that unusual.

"Often in a land development project, the landowner would love to sell his land and step out of the way, however, the developer often doesn't have the resources to buy the land up front," Smith said. "So, we will often set up an LLC just like the proposed here where the landowner would contribute the land and take a percentage of the ownership. The developer or other capital source will be put in and they take a percentage ownership for their part."

Davidson County Attorney Chuck Frye said the terms and conditions of the proposed LLC would have to be clearly defined.

"Regardless of what corporate form we use, the devil is going to be in the details and we are going to have to have a document that spells out what the expectations are with each of the players in the arrangements," Frye said. "It's going to be a challenging document, but one that is going to have to be drafted."

A public hearing will be required before commissioners approve actual allocations for the project, Frye said.

While no public hearing was held Tuesday, several citizens, including government watchdog Barney Hill spoke about the industrial park.

"After the informational meeting, somebody asked me what I thought you should call the LLC for the proposed business park," Hill said. "At first I was stumped, but later the answer became obvious. The appropriate name for such an LLC would be the title of the movie that made Tom Cruise a star: "Risky Business." Risky because when there are so many moving parts, it's much easier for things to go wrong than go right. And the downside potential multiplies in direct proportion to the number of digits after the dollar sign, of which I have lost count."

Nash Dunn can be reached at 249-3981, ext. 227, or at nash.dunn@the-dispatch.com.

<p>Davidson County commissioners voted 4-3 on Tuesday to move forward with a planned industrial park project near Linwood. </p><p>Despite the affirmative vote, commissioners did not appropriate any funding for the project, an action that must come after a public hearing.</p><p>Davidson County Economic Development Commission Executive Director Steve Googe, who asked commissioners for the commitment, said the vote will allow him to talk with landowners, seek loans and work out other specifics about the project. </p><p>Commissioners have been divided over the project since they were first asked to commit $10 million toward the repayment of loans and development costs at the site earlier this year.</p><p>The EDC's plan is to develop about 1,100 acres of property below Belmont Road in Linwood in three phases.</p><p>Commissioners voted Tuesday to move forward with the first phase of the project, which encompasses about 250 acres, Googe said. </p><p>The first phase of the project is estimated to cost about $7.6 million, according to EDC estimates obtained from the North Carolina Department of Commerce.</p><p>Commissioners were originally looking at moving forward with the first two phases of the project, but Davidson County Commissioner Sam Watford recommended that idea be scaled back.</p><p>Watford voted in favor of moving forward with the project, along with Davidson County Commissioners Don Truell, Larry Potts and Fred McClure.</p><p>Davidson County Commissioners Todd Yates, Steve Jarvis and Billy Joe Kepley dissented.</p><p>Before the vote, Kepley went through a long list of concerns he had about the project, including the location of the site, its proximity to major population areas like Thomasville and similar plans for parks in other areas.</p><p>Kepley also voiced concerns about specific things that have occurred in the park's planning and execution in recent years.</p><p>Plans for the Linwood industrial park were once much larger and consisted of a 2,700-acre megasite that extended above Belmont Road to Sam Sharpe Road, according to records obtained from the Department of Commerce.</p><p>In the mid-2000s, several residents who live north of Belmont Road accused a company hired by the Department of Commerce and the EDC of drilling on their land without authorization. Landowners said they were told the drilling was for sewer; however, records now indicate the drilling was for a limited environmental site review for the Department of Commerce and the EDC.</p><p>The EDC also spent tens of thousands of dollars seeking and acquiring options from land owners in the mid-2000s, when Toyota was considering the Linwood site for a possible expansion, according to records. Several land owners recently told The Dispatch they were threatened with eminent domain.</p><p>"Some of these options have been gotten by threats and intimidation," Kepley said. "If you don't sign here, you are going to lose a lot of money because we are going to seize the land through eminent domain. That's not true."</p><p>Kepley went on to say, "I've been in the statute books and somebody getting options or getting benefit this way ... I believe that many times depending on circumstances, that could either be fraud or accusation of property by false pretense. I know how to use those N.C. Statutes. I think that goes deep enough for me to consider asking for a criminal investigation. I am not going to sit here and let our county people be taken advantage of by people like that and scared into signing any type of paper."</p><p>It would take about $17.3 million to pay for the development of the entire site, including money for the extension of sewer, water and gas lines and the grading of one 500,000 square-foot pad and another 1 million-square-foot pad, according to estimates prepared for the EDC. The EDC also plans to install roads, curb and gutters leading to the land at the site.</p><p>The EDC has spent about $400,000 on the project already, including $71,160 on option-to-sell agreements, according to records.</p><p>Googe has also identified several possible grants for the project, and the N.C. Department of Commerce awarded the EDC a $1.67 million Megasite Grant last year.</p><p>The megasite grant, which Googe has said is already in the bank, is to be used for land acquisition and must be used by the end of 2013, according to the grant agreement.</p><p>Several commissioners, including Yates and Jarvis, asked Googe is the grant can still be used for a project that is not at least 1,100 acres, which is also a requirement in the grant's original request for proposal.</p><p>"I don't recall that at all," Googe said. "It wasn't explained to us that way."</p><p>The actual price of the land, which commissioners had asked of Googe before the meeting, is still unclear.</p><p>The EDC's current land acquisition plan involves owners putting their land in a limited liability company with other stakeholders in the project. If a company were to purchase property at the site, members of the LLC would share the profits, according to records.</p><p>Tom Smith, a member of the EDC board and a certified public accountant, said while an LLC sounds like a "strange animal," it's really not that unusual.</p><p>"Often in a land development project, the landowner would love to sell his land and step out of the way, however, the developer often doesn't have the resources to buy the land up front," Smith said. "So, we will often set up an LLC just like the proposed here where the landowner would contribute the land and take a percentage of the ownership. The developer or other capital source will be put in and they take a percentage ownership for their part."</p><p>Davidson County Attorney Chuck Frye said the terms and conditions of the proposed LLC would have to be clearly defined.</p><p>"Regardless of what corporate form we use, the devil is going to be in the details and we are going to have to have a document that spells out what the expectations are with each of the players in the arrangements," Frye said. "It's going to be a challenging document, but one that is going to have to be drafted."</p><p>A public hearing will be required before commissioners approve actual allocations for the project, Frye said.</p><p>While no public hearing was held Tuesday, several citizens, including government watchdog Barney Hill spoke about the industrial park.</p><p>"After the informational meeting, somebody asked me what I thought you should call the LLC for the proposed business park," Hill said. "At first I was stumped, but later the answer became obvious. The appropriate name for such an LLC would be the title of the movie that made Tom Cruise a star: "Risky Business." Risky because when there are so many moving parts, it's much easier for things to go wrong than go right. And the downside potential multiplies in direct proportion to the number of digits after the dollar sign, of which I have lost count."</p><p>Nash Dunn can be reached at 249-3981, ext. 227, or at nash.dunn@the-dispatch.com.</p>